Sales fizzle in June
The beginning of summer didn't give a boost to consumer spending as retail sales fell for the second straight month.
Retail sales unexpectedly slipped 0.1% in June after being unchanged in May. Sales were up 3.2% unadjusted from June 2016, according to the National Retail Federation, and 3.9% on a three-month moving average year-over-year. (The numbers exclude automobiles, gasoline stations and restaurants.)
“Deflating pricing in retail continues to aggravate measurements of spending in June," said NRF chief economist Jack Kleinhenz. "Consumers continue to make purchases, but total sales reflects depressed prices on the volume of goods purchased. Given the strength of consumer sentiment and other indicators – housing prices, net worth and use of credit – it’s puzzling to see consumer spending move at a slower pace.
Sales in June were driven by online and other non-store sales. Building materials and furniture also reported gains, perhaps reflecting a stronger housing market.
• Online and other non-store sales increased 0.4% seasonally adjusted over May and increased 9.9% unadjusted year-over-year.
• Sales at clothing and accessories stores decreased 0.1% seasonally adjusted from May and increased 1% unadjusted year-over-year.
• Sales at general merchandise stores increased 0.4% seasonally adjusted over May and increased 2.3% year-over-year.
• Electronics and appliances stores’ sales increased 1% seasonally adjusted over May and increased 1.6% unadjusted year-over-year.
• Furniture and home furnishings stores’ sales increased 1% seasonally adjusted from May and increased 3.5% unadjusted year-over-year.
• Sales at building materials and supplies stores sales increased 5% from May and increased 5.1% unadjusted year-over-year.
• Sporting goods stores’ sales decreased 0.6% seasonally adjusted from May and decreased 7.7% unadjusted year-over-year.
• Sales at health and personal care stores increased 0.3% over May and increased 0.9% unadjusted year-over-year.
Proposed border tax would hurt these retailers the most
Proposed reforms to the nation's tax code would hurt smaller retailers more than larger ones.
The National Retail Federation said smaller retailers and their employees would suffer more than large companies under a proposal to create a border adjustment tax that would drive up the price of imported merchandise.
“Small retailers are probably the business group that is hardest hit by the potential impact of the BAT,” NRF senior VP for government relations David French said. “They do not have the economies of scale to be able to reduce the higher costs of their merchandise with the BAT imposed and are most likely to lose sales to lower-priced competition. We hope to work with you toward an alternative to the BAT and protect small retailers and the almost 17 million jobs that they contribute to the U.S. economy.”
French’s comments came in a letter to the House and Ways and Means Committee, which was holding a hearing on how tax reform would benefit small businesses, grow the economy and create jobs.
French said the 20% BAT that would be created under the “Better Way” tax reform plan proposed by House Speaker Paul Ryan, R-Wis., and Ways and Means Committee Chairman Kevin Brady, R-Texas, would effectively move the United States toward a consumption tax structure rather than the current income tax structure.
“Our small retail members are very concerned about tax reform efforts that might shift the burden of taxation to consumption,” he said. “Increased costs to the consumer will cause sales to decline and result in a contraction in their businesses. Instead, Congress should reject the BAT proposal and focus on reform of the existing income tax system."
A recent NRF survey of small retailers found that three out of five expect a negative impact on their businesses if the BAT is enacted, and 18% said their businesses could fail. More than 200,000 jobs could be lost to layoffs and wages could be reduced by close to $500 million because of reduced hours for employees. Small businesses make up 98% of the retail industry and provide 40 percent of its jobs.
The BAT provision would end importers’ ability to deduct the cost of merchandise purchased from other countries, resulting in higher prices for consumers. NRF estimates this could cost the average family as much as $1,700 annually.
Shoewear giant taps veteran to head up new division
The parent company of Famous Footwear is expanding its men's and international operations.
Caleres has tapped Malcolm Robinson as president of the company’s new men’s and international division. He will oversee the strategic growth initiatives for the Caleres men’s brands, as well as expand an international footprint across the company’s portfolio.
Robinson most recently served as executive VP at One Jeanswear Group – William Rast Division, responsible for the overall in-store marketing and sales strategy of the licensed William Rast brand. Prior to that, he served as CEO and board member of Tommie Copper and president at Maidenform Brands. He also served as group president of wholesale sportswear at Phillips Van Heusen, and as an executive VP at Gant Corporation.
“Malcolm brings over three decades of deep experience in men’s apparel, brand positioning, merchandising and managing global brands,” said Diane Sullivan, CEO, president and chairman of Caleres. “I’m delighted to have him join us, and to add this role, which will position us to build on our successes in the two significant areas of potential in men’s footwear and the international arena.”
Caleres operates over 1,200 retail stores, the majority under the Famous Footwear banner. Its portfolio of brands include Sam Edelman, Allen Edmonds, Franco Sarto, Vince, Via Spiga, George Brown Bilt, Diane von Furstenberg, Naturalizer, Dr. Scholl's Shoes, and LifeStride.